In Hart v. Rick’s Cabaret Int’l Inc., 09 Civ. 3043, Southern District Judge John G. Koeltl rejected the parent company’s claim that it was not an employer, and thus the dancers were not employees entitled to the laws’ protection, according to the New York Law Journal.

The judge found that the plaintiffs had met their pleading obligations on the employer-employee issue because they had alleged almost complete control over their club activities, including what music they danced to and the pace and manner of their disrobing.  The performers’ principal claims – and they go back as far as 2004 – are that (RCII) failed to pay them minimum wage.  More specifically, they alleged that “they were paid no wages whatsoever.”

In determining whether to allow the suit to proceed against the parent company, Judge Koeltl applied the “economic reality” theory, where the court “looks to the totality of the facts and circumstances of the case to determine whether an entity is an ’employer’ within the meaning of the statute.”  Judge Koeltl also said the plaintiffs raised several issues sufficient to satisfy the “commonality” requirement for a class action. The policy of characterizing them as independent contractors, was one such “unifying thread,” he said.

The plaintiffs charged that RCII directly employs regional managers who oversee club operations, including hiring club general managers, and both regional and general managers report to RCII CEO Eric Langan.  The dancers also alleged that RCII sets rules and guidelines governing them and imposes fines and other disciplinary actions, with the general managers acting as agents directly responsible for hiring, firing and disciplining.

Among the rules imposed; Rick’s dancers are required to cover all tattoos while on stage, pay “shift fees” before beginning work, wear heels of a certain height and refrain from gum chewing. They also are required to schedule their shifts in advance and pay a fine if they do not come to work as scheduled, according to the Law Journal report.

In a third amended complaint, plaintiffs Sabrina Hart and Reka Furedi said the club exercised employer-level control through "entertainer guidelines" whereby they are required to dance on a schedule set by a disc jockey, are not allowed to select their own music, and are "told how much clothing to remove during each song, i.e., top only during the first song and then all clothing, save a G-string, during the second song." 

"The complaint further alleges that the plaintiffs were classified as independent contractors pursuant to a decision by Langan that set the policy for entertainer compensation at RCII's subsidiary clubs nationwide," Judge Koeltl said. "Taken as a whole, these allegations 'raise a reasonable expectation that discovery will reveal evidence' that RCII is an 'employer' of the plaintiffs and the members of the putative class within the meaning of FLSA."

According to the Law Journal, the class certification could cover as many as 1,700 exotic dancers under New York Labor Laws §190 et seq., §650 et seq. and the federal Fair Labor Standards Act (FLSA). Lawyers for the plaintiffs are still proceeding with a collective action that could cover as many as 10,000 dancers throughout the country. Rick's Cabaret International (RCII) oversees 21 adult clubs nationwide, according to the report.